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Floating vs. Fixed Exchange Rates- Macroeconomics 5.4
 
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Float it or fix it? Mr. Clifford expalins the difference between floating and fixed exchange rates and how countries peg the value of their currency to another currency. Make sure to watch this video first: https://www.youtube.com/watch?v=9DVYVfI81R8
Views: 316182 Jacob Clifford
Fixed Exchange Rate System
 
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Fixed Exchange Rate System watch more videos at https://www.tutorialspoint.com/videotutorials/index.htm Lecture By: Ms. Madhu Bhatia, Tutorials Point India Private Limited
Floating and Fixed Exchange Rates
 
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This revision video looks at fixed, managed floating and fixed exchange rates and considers some of the advantages / drawbacks of each choice of currency system. A Level Economics Revision Flashcards These superb packs of revision flashcards contain everything you need to cover for AQA & Edexcel A Level Economics A 20% discount is automatically applied if you order 4 or more flashcard packs in the same order! https://www.tutor2u.net/economics/store/selections/alevel-economics-revision-flashcards CONNECT WITH TUTOR2U ECONOMICS Web: https://www.tutor2u.net/economics Twitter: tutor2u Economics: https://twitter.com/tutor2uEcon Twitter: Geoff Riley https://twitter.com/tutor2uGeoff Facebook: https://www.facebook.com/tutor2u Instagram: https://www.instagram.com/tutor2uecon/ MORE HELP WITH A LEVEL & IB ECONOMICS Online webinars: https://www.tutor2u.net/economics/events/students/online Revision Workshops: https://www.tutor2u.net/economics/events/students/face-to-face Study Notes on every Topic: https://www.tutor2u.net/economics/reference/study-notes Key topics: https://www.tutor2u.net/economics/topics - - - - - - - - - MORE ABOUT TUTOR2U ECONOMICS: Visit tutor2u Economics for thousands of free study notes, videos, quizzes and more: https://www.tutor2u.net/economics A Level Economics Revision Flashcards: https://www.tutor2u.net/economics/store/selections/alevel-economics-revision-flashcards A Level Economics Example Top Grade Essays: https://www.tutor2u.net/economics/store/selections/exemplar-essays-for-a-level-economics
Views: 32776 tutor2u
Fixed and Floating Exchange Rates
 
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Fixed and Floating Exchange Rates - A look at the difference between fixed and floating exchange rates, specifically looking at how fixed exchange rate regimes are managed
Views: 90879 EconplusDal
#72, Foreign exchange rate (Class 12 macroeconomics)
 
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Class 12 macroeconomics ..... Foreign exchange rate.... Foreign exchange.... Types of foreign exchange rate ..... Depreciation and appreciation of currency.... Contact for my book 7690041256 Economics on your tips video 72 Our books are now available on Amazon - for schools and coaching book orders – 7690041256 - special combo conomics on your tips - Indian economic development + Macro economics https://www.amazon.in/dp/B07SXRX62F/ref=cm_sw_r_cp_apa_i_d97.Cb05CXXWW Economics on your tips - Indian economic development https://www.amazon.in/dp/B07SR5GXCX/ref=cm_sw_r_cp_apa_i_p87.Cb9654K8Y Economics on your tips Macroeconomics https://www.amazon.in/dp/B07R561YKH/ref=cm_sw_r_cp_apa_i_3wVXCbE2Z9DZE Economics on your tips Microeconomics https://www.amazon.in/dp/B0742B8GVG/ref=cm_sw_r_cp_apa_i_K1OiDbN8CQHJ5 - Confused about taking the book ? Watch this video - https://youtu.be/A-H5ynYWGks Official series of playlists UG courses ( bcom, bba, bca, ba, honours) – https://www.youtube.com/playlist?list=PLgC10_Xv-BGirAqOr-hU8e-N_Nz0UpgJ- Micro economics complete course – https://www.youtube.com/playlist?list=PLgC10_Xv-BGg5n3YU6oEV7_HIzBuEbbOz Macro economics complete course- https://www.youtube.com/playlist?list=PLgC10_Xv-BGg2ORORpILqiDR1gyH3MkXw Statistics complete course- https://www.youtube.com/playlist?list=PLgC10_Xv-BGjrAkDyeMioJ7DEexAEeVdt National income – https://www.youtube.com/playlist?list=PLgC10_Xv-BGjpE-1V4uz_0wvvbZQnSsj_ In order to promote us and help us grow Paytm on - 7690041256
Views: 452282 Economics on your tips
Fixed exchange rates
 
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In this video you will learn how fixed exchange rate systems work, their advantages and disadvantages and what is meant by devaluation and revaluation.
Views: 7487 EnhanceTuition
Currency pegs
 
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Pressure from the US may have pushed China to unpeg its currency from the dollar this week. But how did that peg work in the first place? Paddy Hirsch explains. #MarketplaceAPM #EconomicExplainers Subscribe to our channel! https://youtube.com/user/marketplacevideos
Views: 36960 Marketplace APM
Fixed vs Floating Exchange Rates (Arguments For and Against)
 
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Fixed vs Floating Exchange Rates (Arguments For and Against) - The arguments for and against a fixed and floating exchange rate
Views: 66967 EconplusDal
Fixed exchange rates
 
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AS Level Economics A Level Economics
Views: 484 G Conomics
Exchange Rates Unit:  Fixed Exchange Rate System
 
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Your IB Economics Course Companion! This is video 3 of 10 videos in “The Exchange Rates Series”. Watch the entire series right here: https://www.youtube.com/playlist?list=PLNI2Up0JUWkH_sdGVbD8ADVwIApVuVIMe As a teacher of IB Economics in Santiago, Chile, these videos were created to help Standard Level students navigate their way through their two-year course of study. I have made these videos public in the hope that they might be helpful to other economics students around the world. It is important to note that I use Jocelyn Blink and Ian Dorton's "IB Economics Course Companion" as the primary text in class. As a result, many of these videos use this text as source material. I have found it to be an excellent resource for students. Another source you may find helpful is Jason Welker’s site www.econclassroom.com. Welker’s site and course companions are excellent and have served as another source for these videos. Thank you Jocelyn, Ian, and Jason. I hope you find these videos helpful to your study of IB Economics and please let me know if you have any suggestions to improve them. Enjoy! Brad Cartwright . Follow on Twitter: IB Specific News and Analysis Daily! https://twitter.com/econ_ib . Follow on Instagram: https://www.instagram.com/econcoursecompanion/ Support Econ Course Companion: https://www.paypal.com/cgi-bin/webscr?cmd=_s-xclick&hosted_button_id=CQS377QG4VM4G&source=url
Views: 11150 Econ Course Companion
6.7 Fixed Exchange Rate Policy AP Macro
 
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But what happens when a government decides they don't want their currency exchange rate to float on the foreign exchange market?
Views: 751 Carey LaManna
Exchange Rate System in India and its Types - Indian Economy for Prelims 2018
 
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You can join my Live classes on Economy here: https://goo.gl/urfp1H In this lesson, Ayussh explains the exchange rate system and its types. This is an important concept to understand under Indian Economy for UPSC 2018 preparation. An exchange rate regime is the way an authority manages its currency in relation to other currencies and the foreign exchange market. Between the two limits of fixed and freely floating exchange regimes, there can be several other types of regimes. In their operational objective, it is closely related to the monetary policy of the country with both depending on common factors of influence and impact. The exchange system in India has a big impact on world trade and financial flows. The volume of such transactions and the speed at which they are growing makes the exchange rate regime a central piece of Indian Economy. Download the Unacademy Learning App here: Android: https://goo.gl/02OhYI iOS: https://goo.gl/efbytP Download the Unacademy Educator App here: Android: https://goo.gl/H4LGHE iOS: https://goo.gl/1FkFHp Do Subscribe and be a part of the community for more such lessons here: https://goo.gl/gycFVs
Views: 19532 Unacademy
Fixed Exchange Rate
 
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See more videos at: http://talkboard.com.au/ In this video, we look at the central government can fix the value of the currency either above or below the fundamental value.
Views: 14025 talkboard.com.au
Chapter 18 Part 2:  Exchange Rate Regimes
 
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This video discusses the various exchange rate regimes. Thanks for watching!
Advantages of a Fixed Exchange Rate
 
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See more videos at: http://talkboard.com.au/ In this video, we will look at the advantages and disadvantages of a fixed exchange rate. It is important to understand what a fixed exchange rate is, so that we can work out how it benefits an economy.
Views: 3349 talkboard.com.au
Fixed Exchange Rate
 
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This clip summarizes three issues that arise in fixed exchange rate systems for a small open economy: (1) Pro-cyclicality of monetary policy, (2) effectiveness of fiscal policy for stabilization, and (3) the possibility of a balance-of-payments crisis in the face of an expected exchange rate devaluation.
Fixed Exchange Rate and Flexible Exchange Rate | International Trade & Balance of Payment Economics
 
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Fixed Exchange Rate and Flexible Exchange Rate | International Trade & Balance of Payment | Economics Videos | Mathur Sir Classes #FixedExchangeRate #FlexibleExchangeRate #InternationalTrade If you like this video and wish to support this EDUCATION channel, please contribute via, * Paytm a/c : 9830489610 * Paypal a/c : www.paypal.me/mathursirclasses [Every contribution is helpful] Thanks & All the Best Please SUBSCRIBE for more videos. https://www.youtube.com/channel/UCqRMmSk8v8MoMhMuw3EUSjQ?sub_confirmation=1 Follow me on: https://www.facebook.com/rajesh.mathur30 WhatsApp - 9830489610 (For Video Recording, Video Editing and other digital services contact 09051378712) difference between fixed exchange rate and flexible exchange rate,fixed exchange rate vs flexible exchange rate,flexible and fixed exchange rate,fixed and flexible exchange rate system in hindi,Fixed Exchange Rate and Flexible Exchange Rate,fixed exchange rate and flexible exchange rate in hindi,flexible exchange rate,fixed exchange rate in hindi,fixed exchange rate,fixed exchange rate system in hindi,flexible exchange rate system,flexible exchange rate system in hindi,flexible and floating exchange rate,fixed exchange rate system,mundell fleming model fixed exchange rate,mundell fleming model floating exchange rate,flexible exchange rate mundell fleming model,balance of trade,balance of trade and balance of payment,balance of trade economics,balance of payment,international trade,economics,balance of trade in hindi,balance of services,balance of unriquited,balance of capital,balance of current account,table of balance of payment a/c,equilibrium of balance of payment,correction of disequilibrium,mathur sir classes,balance of payments
Views: 4236 Mathur Sir Classes
Fixed vs Floating Exchange Rates
 
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AEI scholar Derek Scissors defines and compares fixed vs. floating exchange rates as part of this Tax Foundation University lecture series on the economics of trade.
Views: 2256 TaxFoundation
Fixed Exchange rate & Floating Exchange Rate ? Hindi / Urdu
 
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This Video Give the basic concept of Fixed Exchange rate VS Floating Exchange Rate in Hindi / Urdu My Recommenmd Amazing Gears & Products: 1. Books: https://amzn.to/2Xgbx4L 2. Digital Music: https://amzn.to/2XCmUU2 3. Electronics: https://amzn.to/2XgniIy 4. Computers, Tablets and IT Accessories: https://amzn.to/2XcawL0 My Youtube devices & equipements 1. Boya Microphones: https://amzn.to/2RJ54Jz 2. Dell XPS 15 Laptop: https://amzn.to/2JjoWPU 3. Nikon DSLR Camera: https://amzn.to/2XgrtUx 4. Samsung Galaxy S10: https://amzn.to/2Nlo4iY Follow Me ON: Facebook: https://www.facebook.com/ZPZ-Education-2089120401335326 Dailymotion: https://www.dailymotion.com/za991425 Youtube: https://www.youtube.com/channel/UCwFzeQDf9cGm_ZeTXV_t5SA
Views: 7758 ZPZ Education
How Exchange Rates Work
 
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● We explain topics simply. So Subscribe if you want to learn while being entertained. ✔ Please like the video and comment if you enjoyed - it helps a lot! ▶ If you want a question answered then ask in the comments and we may make a video about it! About the video: You may have traveled a lot and wondered why you get more of one currency when you exchange it for another. If so, you have witnessed exchange rates in action, but do you know how they work? Watch the video to find out what exchange rates are, how to convert between them and the different systems which determine a currencies exchange rate. Historically the gold standard system had been used, which fixed currency to a select value of gold, held in a vault. The three main systems are the floating, managed and fixed exchange rate systems. The floating system has minimal government intervention, using supply and demand to determine the exchange rate. The managed exchange rate is allowed to be within a permitted band and a fixed exchange rate is usually pegged to a currency with the interest of being competitive in the international market. The video explains this in more detail and with helpful picture to guide you through the subject.
Views: 468201 SimplyExplain
Why Hong Kong pegs its currency to the US dollar
 
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Subscribe to our YouTube channel for free here: https://sc.mp/subscribe-youtube Since 1983, Hong Kong authorities have pegged the value of the city's currency to that of the US dollar at an exchange rate of roughly 7.8 to 1. We explain the reasoning for the peg.
Effectiveness of different policies for mundell-fleming ISLM model
 
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A short clip about the effectiveness of fiscal and monetary policy in mundell-fleming model, which is similar to the ISLM framework.
Views: 74794 Bryan Lim
Exchange rate regimes: gold standard, fixed and flexible exchange rate (ECO)
 
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Subject : Economic Paper :Advanced Macroeconomics
Views: 19082 Vidya-mitra
Foreign exchange rate and its types
 
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In this video I am explaining the topic of Foreign exchange Foreign exchange rate Currency depreciation Currency appreciation Types of foreign exchange rate - Fixed exchange rate Floating exchange rate Managed floating exchange rate Plz like and share the video Subscribe my channel to watch more videos of class Xll economics Give your comments at [email protected]
L3/P2: Rupee Devaluation & Exchange rate regimes
 
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Language: Hindi, Topics Covered: - if $1=50 or $1=60: who decides this exchange rate and how? - Fixed exchange rate regime: mechanism and limitations. - Floating exchange rate regime: mechanism limitations. - Difference between devaluation and depreciation of Rupee - Difference between revaluation and appreciation of rupee? - Historic trend of Indian rupee’s fall/weakening against US dollar - How does devaluation of the currency boost its exports? - Difference between NEER and REER? How does it help determining whether currency is undervalued or overvalued? - “Managed” floating extended rate regime. Powerpoint available at http://Mrunal.org/download Exam-Utility: UPSC CSAT, CDS, CAPF, Bank, RBI, IBPS, SSC and other competitive exams, IIM, XLRI, MBA interviews and GDPI Venue: Sardar Patel Institute of Public Administration (SPIPA), Satellite, Ahmedabad, Gujarat,India
Views: 278840 Mrunal Patel
Barry Eichengreen: Pegged exchange rates
 
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Barry Eichengreen, an economist, compares the problems of the gold standard to those of the European Monetary System and the Eurozone. From The Economy, published free online by The CORE Project (http://core-econ.org).
Views: 4183 CORE team
3 Fixed exchange rate system
 
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Views: 4293 ecopoint
Y1/IB 31) Monetary Policy (Interest Rates, Money Supply and Exchange Rate)
 
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AS/IB 21) Monetary Policy (Interest Rates, Money Supply and Exchange Rate) - An understanding of how monetary policy works with reference to central bank inflation targeting as well. Twitter: https://twitter.com/econplusdal Facebook: https://www.facebook.com/EconplusDal-1651992015061685/?ref=aymt_homepage_panel
Views: 128664 EconplusDal
Day 19 - Foreign Exchange - Part 1 - CommerceBaba - Macro Economics Class XII CBSE
 
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Economics Class 12th Chapters are being divided on the basis of topics so as to make it easy for the students to study only what they want and not bore them with irrelevant topics. We have covered in depth the complete chapters (Topic wise) for Commerce students of class 12th strictly as per the requirements of Class 12th CBSE Boards from Session 2018 onwards. For the complete Series of Business Studies Chapters offline E-mail us at: [email protected] Links: www.commercebaba.in www.facebook.com/commercebabaji www.instagram.com/commerce.baba
Views: 100884 Commerce Baba
Flexible Exchange Rate System
 
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Flexible Exchange Rate System watch more videos at https://www.tutorialspoint.com/videotutorials/index.htm Lecture By: Ms. Madhu Bhatia, Tutorials Point India Private Limited
The Determinants of Exchange Rates in a Floating Exchange Rate System
 
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To understand how a country's currency might appreciate or depreciate, you must understand the variable that can affect demand or supply for the currency on the forex market. This lesson will introduce a useful acronym (TIPSY) for remembering the determinants of exchange rates, and evaluate the advantages and disadvantages of floating exchange rate systems. Want to learn more about economics, or just be ready for an upcoming quiz, test or end of year exam? Jason Welker is available for tutoring, IB internal assessment and extended essay support, and other services to support economics students and teachers. Learn more here! http://econclassroom.com/?page_id=5870
Views: 33270 Jason Welker
Fixed and Floating Exchange Rates
 
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​This is a video recording of a revision webinar looking at the economics of floating, managed floating and fixed exchange rates. ​​ - - - - - - - - - MORE ABOUT TUTOR2U ECONOMICS: Visit tutor2u Economics for thousands of free study notes, videos, quizzes and more: https://www.tutor2u.net/economics A Level Economics Revision Flashcards: https://www.tutor2u.net/economics/store/selections/alevel-economics-revision-flashcards A Level Economics Example Top Grade Essays: https://www.tutor2u.net/economics/store/selections/exemplar-essays-for-a-level-economics
Views: 10289 tutor2u
Exchange Rate System | External Sector | Indian Economy | ECONOMY GURU | NEO IAS
 
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INDIAN ECONOMY FOR PRELIMS IN 100 HOURS Video Link : https://youtu.be/NQgMFNCmwkA HOW TO PREPARE INDIAN ECONOMY FOR UPSC CSE PRELIMS 2018? https://youtu.be/A-acqr7u74A BITS ECONOMY Video Link : https://youtu.be/tJkAiJNtvF0 Economy Prelims Telegram Channel - https://goo.gl/DAo5zp To Know more about Economy Guru : https://goo.gl/zwrHiE Exchange Rate System of Indian Economy for CIVIL SERVICES EXAMINATION explained in the simplest way. NEO IAS e-learning classes is an online program which aims to create CIVIL SERVANTS for the development of the nation by providing the video series of complete topics that are relevant for the CIVIL SERVICES (IAS/IPS) Exam.
Views: 43563 NEO IAS
Difference between Depreciation and Devaluation
 
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A depreciation of the value of the exchange rate happens in a floating currency system whereas a devaluation happens inside a fixed or semi-fixed exchange rate system.The central bank changes the official peg / currency anchor price for official trading. This short revision video clip looks at some recent examples.
Views: 15454 tutor2u
Economy for UPSC - Lecture 13.2 - Currency Regime, Fixed, Floating, REER, NEER
 
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Welcome to Sleepy Classes. Top Quality GS Coaching. FREE. Creating IAS from the grassroots of our nation. All the Free Courses available here: On YouTube (arranged in subject-wise Playlists): http://bit.ly/2ECVDWL On Website (with PDFs): http://bit.ly/2MbFHkI Compilations– http://bit.ly/2wqn8yd PAID COURSEs (Prelims+Mains-2020): 1. Prelims + Mains 2020 (WITH Evaluated Answer Writing)- http://bit.ly/2K6Mh9d 2. Prelims + Mains 2020 (WITHOUT Evaluated Answer Writing)- http://bit.ly/2HXJe0n 3. Political Science (Videos + Answer Writing)- http://bit.ly/2M8xmhn 4. Political Science (Answer Writing Only)- http://bit.ly/30Kfv3I 5. Sociology (Videos + Answer Writing)- Available as per Seats in Class on http://bit.ly/2McTFmm Donate - https://milaap.org/fundraisers/SleepyClasses Website: https://sleepyclasses.com/ Android App Available: http://bit.ly/2JI3yGC Telegram- http://t.me/sleepyclasses #UPSC #IAS #CivilServices
Views: 12208 SleepyClasses
Chapter 18 Part 2: Expansionary fiscal policy in a fixed exchange rate system.
 
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Hello everyone, welcome back to my channel! In this video we will look at an expansionary fiscal policy monetary model in a fixed exchange rate system. This is Part 2 Prof. Dr. Georg Stadtmann Lehrstuhl für Volkswirtschaftslehre, insb. Makroökonomie Wirtschaftswissenschaftliche Fakultät Europa-Universität Viadrina
Views: 151 Georg S. ENG
Mod-01 Lec-05 Floating and Fixed Exchange Rate Regimes
 
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International Finance by Dr. Arun K. Misra, Department of Management, IIT Kharagpur. For more details on NPTEL visit http://nptel.iitm.ac.in
Views: 3605 nptelhrd
Exchange rate regime concepts - Episode 1
 
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الموقع الرسمي لبنك المغرب - البنك المركزي المغربي Chaîne officielle de Bank Al-Maghrib -Bank Al-Maghrib official
Views: 2922 Bank Al-Maghrib
Monetary Policy and the Exchange Rate | Macroeconomics
 
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https://goo.gl/2HucLR for more FREE video tutorials covering Macroeconomics.
Views: 3445 Spoon Feed Me
Exchange Rate Policy - Exchange Rates & the Balance of Payments (3/4) | Principles of Macroeconomics
 
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The focus of this video is the different types of exchange rates that exist. Other topics in the series: - the foreign exchange market - exchange rates - demand in the foreign exchange market - supply in the foreign exchange market - market equilibrium in the foreign exchange market - changes in demand in the foreign exchange market - changes in supply in the foreign exchange market - changes in the exchange rate - arbitrage - exchange rate policy - flexible exchange rates - fixed exchange rates - crawling peg - balance of payments accounts - borrowers and lenders - debtors and creditors - the global loanable funds market foreign exchange market | foreign exchange market macroeconomics | foreign exchange trading | foreign exchange risk
Views: 1045 Inspirare
China’s exchange rate policy over the past decade
 
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Ben Bernanke explains the recent changes in China’s exchange rate and economic policy and why they are positive for the country’s economy. https://www.brookings.edu/events/gaining-currency-the-rise-of-the-renminbi/ On September 23, the Global Economy and Development program at Brookings hosted the launch of “Gaining Currency: The Rise of the Renminbi,” featuring the book’s author, Brookings senior fellow Eswar Prasad. Subscribe! http://www.youtube.com/subscription_center?add_user=BrookingsInstitution Follow Brookings on social media! Facebook: http://www.Facebook.com/Brookings Twitter: http://www.twitter.com/BrookingsInst Instagram: http://www.Instagram.com/brookingsinst LinkedIn: http://www.linkedin.com/com/company/the-brookings-institution
Views: 1974 Brookings Institution
Fixed vs. Flexible Exchange Rate Regimes and Policies
 
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Interview granted to "Nova Makedonija" 1. What is your opinion about fixed exchange rate regimes? A. Fixed exchange rate regimes are useful in crisis circumstances, when the restoration of stability and the trust of citizens, investors, and speculators is essential. Such harsh measures, usually coupled with capital controls, should be short-term and lifted immediately when the economy had picked up and expectations have settled. Maintaining a fixed-rate regime in the long-term has nefarious and dangerous consequences as the exchange rate diverges further and further from the real value of the currency, adjusted to inflation. This erodes the competitiveness of exporters, renders imports relatively cheap, distorts the price signal throughout the economy (in other words: people don't know what the real value of their currency is abroad). It also leads to speculative attacks on the currency from the outside (if the currency is convertible and traded in free foreign exchange markets) - or from the inside (in the form of a thriving black foreign exchange market.) 2. What is the connection between exchange rate policies and better economic results? A. This depends on how open the country is to the global capital markets and what percentage of its GDP is made up of international trade and various transfers from abroad (such as remittances.) As a rule, the more exposed a country is to the ups and downs of the global market, the more it should have a flexible and adaptable exchange rate policy. A country that exports and imports a lot needs to have competitive manufacturing, services (e.g., tourism), and agricultural sectors. An important part of such competitiveness is having the correct exchange rate which reflects inflation differentials, purchasing power disparities, relative advantages, and structural elements. Such constant adjustment (up AND down, for instance within a band) is excluded by a fixed rate regime. By adopting a fixed exchange rate, the country is giving up on one of its most important automatic economic stabilizers and policy tools, as Greece is discovering now to its great cost. 3. Is a fixed exchange rate good for controlling inflation? Is there a possibility to control the prices and make a correction of the value of the currency? Inflation reflects expectations of the population regarding the future level of prices. These expectations are affected by the level of stability inside the country - but also by factors outside it. In a country that is open to international trade, foreign capital flows, and foreign direct investment, external instability is far more important than internal stability. Indeed, in countries like Macedonia, Israel, and Brazil, most of the inflation comes from the outside via the soaring prices of imports such as energy products, foodstuffs, and raw materials. There is little the monetary authorities can do to affect such imported inflation. Still, it is true that a string of unannounced, arbitrary, unscripted, incomprehensible, and large devaluations will create inflation. The exchange rate policy has to be transparent, predictable, rational, and adaptable. There are dozens of countries around the world with various modesl of flexible exchange rates and, yet, with stable prices: these two are not mutually exclusive. Flexible exchange rates mean that the currency can do down (devaluation) - but also up (appreciation or revaluation.) 4. What happens to an economy if people from abroad stop sending money? Depends on: (1) What is the share of remittances in the GDP; and (2) What are the remittances used for. In most poor countries remittances constitute 10-15% of GDP and they are used by the recipients mostly for consumption. When remittances decline, consumption and GDP are adversely affected, the level of foreign exchange reserves declines, and outlays on social welfare increase. 5. Can a country defeat the trade deficit with a fixed exchange rate? The exchange rate is only one component in the overall competitiveness of the economy. Structural reforms in the public sector and various institutions; infusion of management and marketing skills; innovation; a functioning financial system; new inputs (equipment, information technology, intellectual property under license); focused and up-to- date training and re-skilling; better access to core export markets; the economic conditions in these export markets; level and relevance of the workforce's education; mentality and ethos - all these are as important as the exchange rate alone. Germany and Japan had overvalued currencies for decades and still were able to achieve prosperity and dominate international trade.
Views: 10360 vakninmusings